The lightening rod that is Rep. Paul Ryan's budget Roadmap has attracted a fresh summer storm over the last few days, with Paul Krugman, Nate Silver and our own Megan McArdle in a war over whether Ryan is, or is not, a flimmy-flammy fraud. My politics are closer to Krugman, but here I side with my editor, and not solely for reasons of employment.
Much of the tactical debate here is about how Ryan got his plan "scored," or evaluated, by the Congressional Budget Office. I find the inter-agency politics of Congress, the CBO, and JCT fascinating, but I have a sense that this is one of those things, like my deep affection for plain rice, or my belief that Coldplay is a band with great artistic merit, where I'm basically alone. So if you want that story, click over to Megan.
Now about the plan, itself. Ryan would freeze tax revenues just above their historical average, at 19 percent of GDP. But little about our tax system would be frozen solid. We'd add a consumption tax, and lose the corporate income tax. The top 0.1 percentile would get a two-million-dollar tax break. Tax deductions -- for health care, mortgage interest, charitable donations -- would disappear. This change would be transformative, but one number would matter more than all other numbers: 19 percent of GDP. When Ryan responds to criticism of his plan raising less money than promised, he says he'd be willing to tinker with rates to achieve that figure.
That puts all the heavy lifting on the spending side, and it is very, very heavy lifting. In order to control Medicare costs, Ryan simply mandates slower spending on Medicare by turning the pay-for-service system into a voucher program. Rather than keep up with the accelerating cost of caring for the elderly, we simply ... won't. It's true that if you don't pay for our seniors' health care, we won't break the bank by paying for our seniors' health care. But it's not politically sellable. Nobody wants it.
Indeed, Ryan has flat-out accused fellow Republicans of putting pollsters above principle by not signing on to his plan, which is a kind of apotheosis of conservatism. I don't hate the plan. I love it, for existing. No other Republican has proposed a consumption tax, and Ryan just paired a consumption tax with the slow-motion erosion of Medicare. That's an extraordinary leap for an elected representative, and I'm not sure what Krugman thinks he's achieving with all this talk about which intragovernmental office scored what.
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